The U.S. Department of Labor reportedly is investigating a prominent hedge fund sponsor over its handling of hundreds of thousands of dollars in pension funds at some of the U.S. newspapers in its control.

The investigation focuses on Alden Global Capital, the controlling shareholder of MNG Enterprises, the publisher of more than 100 local news properties, including The Denver Post and the Boston Herald. The properties are run under the brand MediaNews Group and have also operated under the name Digital First Media.

As much as 90% of some of MNG newspapers' pension assets were invested in two hedge funds controlled by Alden during the last few years, U.S. Department of Labor records show.

An unnamed spokesman for the hedge fund sponsor confirmed that Department of Labor officials are investigating the investments,
the Washington Post
reported on Wednesday.

Most of those pension assets have since been transferred out of the funds, MNG said in a separate statement.

An Alden representative could not immediately be reached for comment. Megan Sweeney, a Department of Labor spokeswoman, did not respond to a voicemail seeking comment.

Gene Forbes, who works in the pre-press department of The Denver Post, holds up a placard during a rally against the paper's ownership group, Alden Global Capital, May 8, 2018, outside the paper's office and printing plant in north Denver. Members from all guild units were on hand in Denver for the rally at which they urged Alden Capital to invest in the newspapers that it controls or sell the properties.

U.S. Senate Democratic Leader Chuck Schumer, D-New York, in February
sent Alden a letter
that asked how the proposed acquisition could affect newspaper pension plans, potential staffing, and other issues. Last week, Schumer
also wrote to the Department of Justice and the Pension Benefit Guaranty Corp.
requesting information on the impact of a potential combination of MNG and Gannett on the news industry, including antitrust issues, after saying he was "troubled" by MNG's response to his earlier inquiry. Schumer cited what he called the company's failure to make commitments regarding newsroom staffing and to address potential regulatory concerns.

Hugh Burns, a spokesman for MNG, told USA TODAY that the Alden investments complied with provisions of the
Employee Retirement Income Security Act
, the federal statute that safeguards private industry pension funds.

The law requires individuals or companies that handle pension fund investments or provide advice on investment selections to "act prudently," and says they "also must avoid conflicts of interest."

"A portion of MNG's pension plan assets were successfully managed by Alden, for which MNG's pension plans were not charged and paid no management or performance fees, resulting in less expense to the plans," said Burns. "In 2017, consistent with its return of other outside capital, Alden began winding down its management of these pension plan assets, making regular cash distributions to the MNG pension plan investors."

Alden currently manages " less than 0.5% of the assets in MNG's sponsored single-employer defined benefit plans," added Burns. "MNG believes that Alden's management of the pension plan assets for which it provided management services has at all times complied with all legal requirements, including ERISA."

Roughly $106.7 million in pension assets from the San Jose Mercury News, now called The Mercury News, were invested in the two funds during 2015. That represented nearly 90 percent of the total assets, the records show.

More than $45 million in Denver Post pension assets, representing 91 percent of the retirement plan's assets, were invested with the Alden funds during 2015, the records show.